Premium Essay

Economic Policy and the Global Environment

In: Business and Management

Submitted By moonylove
Words 2319
Pages 10
Summary of article

The central bank of Singapore; Monetary Authority of Singapore (MAS), has reported slowing down the pace of the Singapore dollar's appreciation to stimulate the economic growth. During the beginning of the 4th quarter this year, it was reported that Singapore's core inflation had reached a six-month high record of 0.6 per cent in the year, but the possible issue of deflation due to the slow global growth is still the primary concern for most. One of the other reason that why MAS wants to use a more aggressive easing approach to slow the local dollar’s gain against its trading partners could be the need of guarding against the import inflation. Due to high demand, Singapore yearly imports around S$464 billion of goods and major of them are the fruits and vegetables, the weakening of Singapore dollar compared to US dollar makes the prices of most imported perishable items more expensive. The secondary reason could be coming up with fiscal expansionary policy measures to revive the growth mainly because the government’s spending on building infrastructure over the past years have shown positive effects. Lastly, the estimation of unexpectedly stronger advance Gross Domestic Product (GDP) growth in the third quarter could be the reason for slowing the pace of local dollar appreciation.

Introduction

Due to the scarcity of land and labor, Singapore is facing not enough manpower and at the same time underemployment and also imported inflation. Underemployment occurs when the employees are highly-skilled but working a low paying or low-skilled jobs. This situation will have an impact on the median monthly income of a full-time employee which as per reported on June 2015, it has rose by 4.7 per cent to S$3,949 at the same time, for the low-income workers, they also have an increment in their income (Channel…...

Similar Documents

Free Essay

Economic Environment

...year (Stewart 2012). BHP's job cuts is accompanied by other global mining companies such as Rio Tinto to confront a retrogressive market with falling industrial commodity prices and increasing costs. The future of Australia's mining boom which is largely dependent on Chinese demand for commodities driven by its economic growth is of particular concern (Stewart 2012). Application of Concepts Both economic environment and the concept of corporate social responsibility (CSR) can be demonstrated in this article. In particular, the nature of BHP's mining business, which is regarded as a significant contributor to Australian economy (Maddock and McLean 1987) determines its need to pay close attention to the opportunities and threats posed by the global economic environment (Blainey 2003). For example, slowdown in China's economic growth and recent European economic recession have impact on Australia's resource exports (Stevens 2012). The Australian mining industry which has once benefited from the surge in demand driven by the rapid growth of emerging economies in Asia since 2003 and the shortage of global supply (Stevens 2012) is now facing a difficult period signaled by the drop of China's GDP growth from 10 per cent to a mere 8 per cent (Connolly and Orsmond 2011). China's demand for resources has declined as a result of its slowdown in industrialisation and urbanisation, causing a significant decrease in global steel prices and thus a huge downward influence on BHP's......

Words: 794 - Pages: 4

Premium Essay

Global Economic Environment

...Global Economic Environment Generally, global economic environment is influenced by various factors such as technological, environment, political, socio-cultural, and demographic that directly affects businesses. Economic environment refers to the nature of economic systems and policies, distribution of income and wealth, and level of income. Indeed, economic environment has a complex and very dynamic nature; it is continually changing along with the changes in political situations and government policies. Global Economic Environment Mainly, global economic environment is comprised of several components including the economic systems, conditions, policies, legislations, and environment. Indeed, the economic policies being imposed in every business unit are significantly influences by the overall condition of economy. This includes the improvements that occurred in economic conditions such as the purchasing power of the public, standard of living, distribution of income, and supply and demand. Mainly, these factors reflect the size of the market. Another factor reflecting the economic condition is the business cycle, which is critical to every business unit. It refers to the different stages such as prosperity, boom, decline, depression, and recovery. The economic condition of a country can be understood through its national income, per capita income, and distribution of income, demand and supply trends, inflation rate, industrial growth rate, trends in industrial......

Words: 812 - Pages: 4

Premium Essay

Economic Analysis: Monetary Policy & Environment

...In a free market society where firms and households shape the economy, government intervention can significantly contribute to economic stability and improve current economic outcomes. The successful use of government policy tools is evident through an examination of environmental economics, monetary policy and the labour market. With regards to the environment and the labour market, the government have made use of taxes, permit trading systems, general regulations and transfer payments to influence economic outcomes in each of these respective fields. By studying monetary policy it is also apparent that control over the interest rate mechanism is another effective tool used by policymakers to enhance the present and future economic circumstances of a nation. As society continues to expand, the quality of the environment is beginning to deteriorate. Governments to prevent this from occurring and to avoid market inefficiency, can help the economy through policy tools such as enforcing taxes and regulating pollution permit trading systems. As shown in Figure 1 below, market equilibrium (Me) on its own is inefficient because it does not take into consideration the negative externalities that arise during production and does not account for a lack of incentive by firms to incorporate additional production costs. The implications of market failure will mean that a society will not be allocative efficient and as a result output will be greater than it what it should be (Q0......

Words: 1261 - Pages: 6

Premium Essay

Counteracting the Global Economic Crisis: Values, Institutions, Policies.

...Counteracting the global economic crisis: values, institutions, policies. When talking about the broad and complicated subject of economic crisis, it is important to mention ideas concerning neutralization of its consequences and prevention of future calamities. The current disturbance in the global economy requires not only to understand how it was initiated, but also how to counteract and draw conclusions from it. The Chinese proverb says: “may you live in interesting times.” These times are now- financial markets are in turmoil, China is rising as economic power, young people from Europe and America are protesting against, what they see as ineffective government and regulations. In next years the world will change even more- also thanks to changes, that will be made as an answer to the global economic crisis- in terms of values, necessary institutions and policies. The first step toward ending the crisis is to introduce new regulations, that would stabilize the market. Since 1980’s the American financial market has been experiencing a long period of deregulation. Although the obvious results of this move- the example can be the deregulation of savings and loans companies, that led to crisis in 1989, the process continued. Decade later, in 1990’s the new market instruments- derivatives, became increasingly popular. Although, their allies argued that they would stabilize the market, the opposite happened. Any attempt to regulate hedge funds was cut out by......

Words: 902 - Pages: 4

Premium Essay

Global Economic Environment in: Business and Management Global Economic Environment Global Economic Environment Generally, Global Economic Environment Is Influenced by Various Factors Such as Technological, Environment,

...Global Economic Environment In: Business and Management Global Economic Environment Global Economic Environment Generally, global economic environment is influenced by various factors such as technological, environment, political, socio-cultural, and demographic that directly affects businesses. Economic environment refers to the nature of economic systems and policies, distribution of income and wealth, and level of income. Indeed, economic environment has a complex and very dynamic nature; it is continually changing along with the changes in political situations and government policies. Global Economic Environment Mainly, global economic environment is comprised of several components including the economic systems, conditions, policies, legislations, and environment. Indeed, the economic policies being imposed in every business unit are significantly influences by the overall condition of economy. This includes the improvements that occurred in economic conditions such as the purchasing power of the public, standard of living, distribution of income, and supply and demand. Mainly, these factors reflect the size of the market. Another factor reflecting the economic condition is the business cycle, which is critical to every business unit. It refers to the different stages such as prosperity, boom, decline, depression, and recovery. The economic condition of a country can be understood through its national income, per capita income, and distribution of income, demand......

Words: 279 - Pages: 2

Premium Essay

Economic Environment

...Macroeconomic and Microeconomic environment Macroeconomics looks at aspects of economies as a whole instead of the individual markets, basically a study looking at the bigger picture of the economy. Offering a broader focus is probably the most important difference between microeconomics and macroeconomics. This branch of economics is one of the two most general fields, particularly looking at the structure, behaviour, decision-making and performance of national, regional and global economies. Through the study of aggregated indicators, macroeconomists understand the functioning of whole economies. By using GOP, unemployment rates and price indices an explanation can be made in regards to the relationships between national income, current unemployment levels, changes in employment, pricing levels, inflation, savings, investment, international trade and the rate of growth. Even though there is a broad field of study where macroeconomics is concerned, two areas of research are of utmost importance: * Understanding the causes and consequences of the business cycle, which include fluctuations in trade, economic activity and trade during periods of rapid economic growth and periods of decline. * Understanding the demands of a particular product, service or commodity during a long period of time in which national income increases. Macroeconomics enables large corporations and governments to analyse variables and behaviour's to find answers to questions such......

Words: 1187 - Pages: 5

Premium Essay

Impact of the Current Global Economic Environment at Costco

...Executive Summary Costco is one of the most profitable retail stores in the United States at the moment. This is in spite of the prevailing tough global economic times and stiff competition from stores such as Wal-Mart and Target. Costco, a members’ wholesale retail store, was founded in 1983 in Washington by Jeffrey Brotman, who serves as the current Chairman of the board of directors and James Sinegal, the current company president. Costco has not been spared by the current global economic conditions. They have affected it in a number of ways that have made the company’s management respond in a manner that is meant to ensure that the business not only survives but grows even stronger. First, Costco has taken strong measures to keep enough employee numbers. Customers are better served by employees who are in good health. Employees are not going to be in good health if they work long hours and cannot visit a doctor when sick. Costco employees work normal hours since there are enough employees to serve the company’s customers. While other stores such as Wal-Mart have seen it fit to downsize their workforces, Costco has moved to ensure that employees are of the right numbers all over its stores within and without the United States. Secondly, the current tough global economic conditions have driven Costco into extending good salaries to its employees. The good compensation has ensured that employees are well motivated and ready to serve customers in a better manner. As......

Words: 4526 - Pages: 19

Premium Essay

Global Economic Environment

...Assignment 1 Questions Derrick Shoemaker 10/14/2012 MBA6008 - Global Economic Environment Assignment 1 Questions Question 5 page 21 a) Chart of production possibities, the production function shows the relationship between the quantity of inputs used in production and the quantity of output resulting from production. b) Economy is at "C" then automobile will be at "6" and forklifts would be at "19" Notice that the production possibility curve slopes downward from left to right that means that there is an inverse relationship between automobiles and forklifts. So this would be a representation of its shape. c) In the law of opportunity when the slop is steep there's a high opportunity cost for automobiles and low opportunity for forklifts. But that of that it being flat of 3 automobiles to 20 forklifts the opportunity for forklifts are higher to automobiles. d) 1. No 2. When technology improves, when more resources are discovered it will give more output with the same inputs. What I mean is that when technology improves the entire production possibility curve shifts outward. 3. As with technology this would also increase in international growth which would lead to growth in the production curve. This also would state that current production possibilities could outgrow it production curve. Income per year |   | Savings per year |   |   |   | 20,000 |   | 1500 | 15,000 |   | 1000 | 10,000 |   | 500 | 5,000 |   | 0 | 0 |   |......

Words: 515 - Pages: 3

Premium Essay

The Economic Environment

...Economic Environment This Unit covers the second of the PESTLE elements LEARNING OUTCOMES The application of trade theory to explain the benefits of engaging in International Trade Economic Implications of a country’s membership of a trading bloc for a business Compare the various types of Foreign Direct Investment (FDI) and analyze how they may affect the various countries involved as well as the businesses within these countries INTERNATIONAL TRADE THEORY Four Theories of International Trade are: Absolute Advantage Product Life-cycle Theory New Trade Theory Porter’s determinants of National Competitive Advantage MERCANTILIST THEORY States that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports. Aim is to maximize exports and minimize imports. Rest on the idea that if one country gained, then another must lose. MERCANTILIST THEORY Problems : This theory excludes the fact that in some cases it is good to import. By discouraging import the population will have to do without certain consumer items. ABSOLUTE ADVANTAGE This concept is generally attributed to Adam Smith . Refers to the ability of a country/firm to produce greater output of a good or service than other countries/firms using the same amount of resources. Smith argued that a country should specialize in producing those goods/services for which it has an absolute advantage. Countries would......

Words: 2401 - Pages: 10

Premium Essay

Economic Environments

...Economic Environments within Businesses Economy Great Britain is one of the world's leading industrialized nations. It has achieved this position despite the lack of most raw materials needed for industry. It must also import 40% of its food supplies. The UK has been dependant on the export of manufactured goods in exchange for various raw materials and food. The countries manufacturing sector includes; machines tools, electric power, motor vehicles, metals, chemicals,paper, textiles, clothing etc. Economics is concerned with the process of satisfying the needs and wants of the population, by using the limited resources of the economy in the most efficient way. There are generally considered to be four main objectives of an economy: A low level of unemployment A low level of inflation A high level of economic growth A good foreign trading position Gross Domestic Product (GDP) The value of a country's overall output of goods and services at market prices, excluding net income from abroad. GDP can be estimated in three ways which, in theory should yield identical figures. They are; Expenditure basis: how much money was spent Output basis: how many goods and services were sold Income basis: how much income (profit) was earned. The main criticisms of GDP as a realistic guide to a nation's well-being are that; It is preoccupied with indiscriminate production and consumption. It includes the cost of damage caused by pollution as a......

Words: 960 - Pages: 4

Premium Essay

Economic Policy Issues to Address Global Warming

...still known but no one continues to create a solution to this growing problem. We on earth face a challenge, and we need to find the solution. This solution can be reached through economics and science combining forces to ensure that future generations are able to survive and thrive. By understanding the nature of the global warming and creating effective economic policies we are able to become a step closer to making all the difference. The Global Warming Problem Global warming refers to the dramatic rise in the earth’s temperature due to the excess emission greenhouse gases such as carbon dioxide, water vapor and methane. This phenomenon of global warming has major implications for humanity and nature. With rising sea levels, hotter and drier weather and increases in uncertainty humanity is at risk and the natural environment. These turbulent conditions lead to rapid changes in economic activity in terms of out produce, the way in which all living things can exists. It is through the introduction of policies by governments and other bodies that these effects can be reduced and hopefully overcome. Range of policies in addressing the issue and how each option works: To tackle the problem of global warming, governments have access to a range of policy option. The objective of these policies is to reduce the emissions of carbon dioxide into the atmosphere by providing incentive and ways to effectively delegate the cost of producing to both producers and consumers. This...

Words: 1269 - Pages: 6

Premium Essay

Global Economics

...to avoid the worst effects of the economic crisis that gripped most of Europe during 2008-2009? Answer: There are three points that Poland able to avoid the worst effects of the economic crisis that gripped most of Europe during 2009-2009. Firstly, Poland has a stable economic policy. Poland government keeps the public debt in check and they don’t allow it to expand during the recession. Because of the main sources of economic crisis come from debt, stable economic policy can maintain the basic economic activity as Poland government does not need to pay a huge of debt. Polish debt-GDP ratio is about 23% in 2007 only. It’s lower than other countries. (Reference1) Secondly, free market and free trade policy helps a lot in maintaining polish economy. Free market attracts many investors to invest in Poland. This table shows that The FDI stock of Poland is about 53 billion which are higher than other countries. (Refrence2) The last factor is Poland has a stability and development plan. It aims at strengthening the polish economy during the world financial crisis and it amount up to 91.3 billion zloty in activities to stimulate investment in the polish economy. The first goal of Poland’s stability and development plan is prevent overheated economy. Poland was designed to curb inflation and ease Poland’s entry into the European Union in the early 2000s by using tight MPC. The inflation rate of Poland is lower than 5% after tight MPC policy. (Reference3) The second goal of...

Words: 1531 - Pages: 7

Premium Essay

The Global Economic Environment

...CHAPTER 2 THE GLOBAL ECONOMIC ENVIRONMENT SUMMARY A. The economic environment is a major determinant of global market potential and opportunity. In today’s global economy, capital movements are the driving force, production is uncoupled from employment, and capitalism has vanquished communism. Based on patterns of resource allocation and ownership, the world's economies can be categorized as market capitalism, centrally-planned capitalism, centrally-planned socialism, and market socialism. The final years of the twentieth century were marked by transitions toward market capitalism in many countries that had been centrally controlled. However, great disparity still exists among the nations of the world in terms of economic freedom. B. Countries can be categorized in terms of their stage of economic development: low income, lower middle income, upper middle income, and high income. Gross domestic product (GDP) and gross national income (GNI) are commonly used measures of economic development. The 50 poorest countries in the low-income category are sometimes referred to as least-developed countries (LDCs). Upper middle-income countries with high growth are often called newly industrializing economies (NIEs). Several of the world’s economies are notable for their fast growth; the BRIC nations include Brazil, Russia, India, and China. The Group of Seven (G7), Group of Eight (G-8), and Organization for Economic Cooperation and Development (OECD)......

Words: 8143 - Pages: 33

Premium Essay

Economic Policy

...EC3010 - Economic Policy Assignment 1 The nature of the ongoing financial crisis merely confirms what Economists have known for some time, namely, that the interconnectedness of global economic activity renders macro-management by single governments redundant. Their function is now to regulate markets to ensure economically efficient solutions. Module Leader :Paul McKeown Student Name: Chen JiaHui Student number: G20555142 1.0 Introduction This report argues that the ongoing financial crisis merely confirms the global political consideration what economists have known for some time. Firstly, it briefly explains how the financial crisis spread around the world in such a short time by globalisation. This report points out that the global financial system is inherently flawed, showing how economies go from stability to instability. Subsequently, it focuses on the link between economic globalisation and macro-management by single government, considering whether Macro-management of a country’s economy is redundant, given the global interconnectedness economy’s activity and business. This report shows government policy has reduced the effectiveness of interconnected economies, such as fiscal policy and monetary policy. After that, it emphasizes that it is imperative for governments to regulate financial markets so as to ensure economically efficient solutions. Consequently, this report concludes that although macro-management by single government is less......

Words: 2380 - Pages: 10

Premium Essay

Global Economics

...availability of raw materials and components. The importance of trade barriers and quotas may also diminish with China’s admission to the WTO. Trade barriers and existing quotas in the EU and the United states would fall and the possibility for China to negotiate worldwide reductions on import duties would be open. The global supply chain of footwear which developed in the last decade and which is replacing the traditional pattern of integrated shoemaking (leather processing, tanning, finishing and shoe manufacturing in many developed countries) has been an agent for the transfer of designs, the introduction of modern management practices, quick response, and technology and quality improvement to producing developing countries participating in outsourcing, and has provided the producer countries with indirect access to major markets. Competitiveness in the production stages of the chain has been addressed, in many instances, through the promotion of collective efficiency by enterprises operating within clusters and industrial districts as discussed in other sections of the paper The design and managing of different types of marketing and distribution global chains represent the challenge of the present decade to stay competitive in a fast changing world. Labor costs continue to be a dominant factor of competitiveness. The slow technical development in footwear operations, particularly in the production of uppers makes footwear manufacturing such a labor intensive......

Words: 2928 - Pages: 12